Transaction Fees Key to Miner Retention in Bitcoin Network, Says ViaBTC
Summary:
ViaBTC, a leading cryptocurrency mining pool, suggests that transaction fees from applications Ordinals, Runes, and BRC-20s will be essential for the retention of miners in the Bitcoin network, even as more halving events occur. Their experience on April 20 demonstrated the potential for high revenue from Bitcoins, and their belief is that if these transactions gain broader utility and technological advancement, they may attract greater recognition and stabilize miner revenue.
The maintenance of miners in the Bitcoin network hinges on transaction fees from applications such as Ordinals, Runes, and BRC-20s, even as further halving events happen, suggests a leading cryptocurrency mining pool, ViaBTC. They emphasized that the expanding user base and diverse use cases have significantly influenced the fee income from on-chain transactions earned by miners. Ordinals launched in January 2023, and until that point, miners depended on the transaction fees associated with peer-to-peer exchanges in addition to the block subsidy, which lessens after every 210,000 blocks. This reduction has an irrefutable effect on the miners' long-term revenue. Although a surge in Bitcoin's (BTC) value can boost mining revenue, further advancements in the application layer will enhance network activity, widen its utility, and reward miners generously.
ViaBTC witnessed this phenomenon on April 20 when they mined the much-desired halving block, numbered 840,000, which entailed a record-breaking 37.6 BTC transaction fee, then worth around $2.4 million. Including the 3.125 BTC block subsidy, the total prize was 40.7 BTC; this was triggered by memecoin and non-fungible token fans, who aspired to inscribe “rare satoshis” and fungible tokens using the freshly launched Runes token standard.
They confessed to having a gut feeling that transaction fees would pass the 30, 40, 50 BTC mark but never thought they would reap such a substantial reward, especially at the halving block. Bitcoin miners collected a staggering $78.3 million on halving day — higher than what Ethereum stakers and Uniswap liquidity providers netted in nine out of the last 20 days since the halving.
According to the pseudonymous creator of Bitcoin, Satoshi Nakamoto, it was anticipated that miners' major income source would shift towards transaction fees as block subsidy halves. ViaBTC commented, "If these transactions find wider utility in the future and make significant technological advancements, they may gather more attention and recognition." Nonetheless, the popularity swings of Ordinals inscriptions, Runes, and BRC-20s since their respective launches have caused some variations in miner revenue.
Since ViaBTC's start-up in 2016, it has weathered three halving events, with block 840,000 being the 37,534th mined block in its 2,900-day lifespan. The mining pool utilizes hash rates sourced from miners in 118 countries.
Published At
5/10/2024 5:11:26 AM
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